5 Nov 2012 07:00
For Immediate Release
5 November 2012
LENI GAS AND OIL PLC
("LGO" or the "Company")
Sale of Leases, Gulf of Mexico
LGO today announces it has signed a definitive Purchase and Sale Agreement for its remaining minority interests in the US Gulf of Mexico ("GOM") for a cash consideration of $1.625 million to a USA group (the "Buyer"). The sale is expected to be completed this week.
The funds obtained will reduce the needs to source additional capital through the equity or debt markets and will permit LGO to actively accelerate the development of its exciting Trinidad portfolio, particularly on the Goudron Field, where the Company has recently reported proven and probable (2P) reserves of 7.2 million barrels of oil and 3P reserves of 30.5 million barrels.
Leni Gas and Oil US Inc, a wholly owned subsidiary of LGO, has agreed to sell its remaining interests in seven leases ("the Leases") in the Gulf of Mexico, including the marginal producing Eugene Island-184 field. LGO announced on the 18 September that it had received a firm expression of interest to purchase its remaining assets in the Gulf of Mexico, including the Eugene Island field and had signed a non-binding indicative offer for US$1.625 million subject inter alia to title due diligence. The Company indicated that it was considering accepting, since the GOM assets were viewed as non-core. That offer has been superseded by this new definitive Purchase and Sale Agreement with the same purchaser.
For the year ended 31 December 2011, the revenue and gross profits attributable to the Leases were £383,000 and £204,000 respectively and the gross asset value as at that date was £5.78 million.
All three participants in the Leases have sold their interests to the Buyer and as part of the transaction, LGO and Byron Energy Inc have also terminated their Strategic Alliance Agreement signed in November 2009, which was due to expire in any event later this month.
Neil Ritson, LGO Chief Executive, commented:
"Our investment in the offshore Gulf of Mexico has become a distraction to LGO's main strategic drive to invest in onshore production enhancement projects in Trinidad, where LGO holds both high equity positions and field operatorship. These funds will be used to fast track the Goudron redevelopment, for which a second work-over rig will be mobilised to the field shortly."
Competent Person's Statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Chief Executive Officer and Director for Leni Gas & Oil Plc who has over 35 years of relevant experience in the oil industry. Mr. Ritson is a member of the Society of Petroleum Engineers, an Active Member of the American Association of Petroleum Geologists and is a Fellow of the Geological Society of London.
Enquiries:
Leni Gas & Oil plc
David Lenigas Neil Ritson | +44 (0)20 7440 0645
|
Beaumont Cornish Limited
Nomad and Joint Broker Rosalind Hill Abrahams Roland Cornish | +44(0) 20 7628 3396 |
Old Park Lane Capital Plc
Joint Broker Michael Parnes Luca Tenuta | +44(0) 20 7493 8188 |
Shore Capital
Joint Broker +44 (0) 20 7408 4090
Pascal Keane
Jerry Keen (Corporate Broking)
Pelham Bell Pottinger
Financial PR Mark Antelme | +44 (0) 20 7861 3232 |
Henry Lerwill |
Glossary:
Possible Reserves
| those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high estimate scenario |
Probable Reserves
| those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves |
Proven Reserves | those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations |